H-1B visa: Trump trouble for Indian IT industry

Looking to fulfil one of his major election promises, US President Donald Trump has signed an executive order to revamp a temporary visa programme that allows foreign workers, mostly Indian IT professionals, to find jobs in the US, a move that is set to hit the Indian IT sector. Riding on his rallying cry of “Buy America, Hire America,” Mr Trump visited a manufacturing firm in Kenosha, Wisconsin, a state he snatched from Democrat rival Hillary Clinton in the presidential election last year, before putting his signature on the order that would seek to address alleged abuses in the H-1B visas which are used largely by the tech industry. H-1B visas allow 65,000 workers and another 20,000 graduate student workers each year. Most of the visas are awarded to technology outsourcing firms which, critics say, exploit holes to fill lower-level IT jobs with foreign workers, often on lower wages. Mr Trump’s executive order asks government departments to introduce reforms to ensure that H-1B visas are awarded to the “most skilled or highest paid applicants”, a White House official told reporters in Washington. “Right now, widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for, sometimes, less pay. This will stop,” Mr Trump told an audience in Wisconsin, clearly having on mind the working class which voted for him in droves. He said the order sets in motion the first steps to initiate “long-overdue” reforms to end “visa abuses”. He said the awarding of the visa would be changed from the lottery-based system to merit-based criteria. “Right now, H-1B visas are awarded in a totally random lottery, and that’s wrong. Instead, they should be given to the most skilled and highest-paid applicants, and they should never, ever be used to replace Americans,” the US president. He added that “no one can compete with American workers when they’re given a fair and level playing field, which has not happened for decades.” The executive order also declares that American projects should be made with American goods. “No longer are we going to allow foreign countries to cheat our producers and our workers out of federal contracts. Everyone in my administration will be expected to enforce every last ‘Buy American’ provision on behalf of the American worker and we are going to investigate every single trade deal that undermines these provisions,” he said. A White House statement said H-1B visas are supposed to bring the highest skilled and paid labour to the US. According to studies, however, 80 per cent of the approved applications were for the two lowest wage levels allowed. “Currently, companies routinely abuse the H-1B visa programme by replacing American workers with lower paid foreign workers,” it said. The Associated Chambers of Commerce cautions the Indian IT industry to brace for taking a hit by Mr Trump’s signing the executive order pointing out that nearly 86 per cent of H-1B visas issued for workers in computer space go to Indians. This number is expected to dip to 60 per cent or even less, an ASSOCHAM study says. The curbs on H1B visa regime will push up the costs for Indian IT firms, it says as the rising value of Rupee is also putting pressure on the profit margins of technology export firms. This may mean that “chances of layoffs are real,” said ASSOCHAM Secretary General D. S Rawat.